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Building an AZ solar supply chain and industrial cluster

Arizona Solar Summit
Arizona Solar Summit

R&D can help build the cluster by developing new technologies and attracting related businesses. However, more is needed for sustained growth.

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Building an AZ solar supply chain and industrial cluster Glenn Hoetker Anthony Evans
Our mission More investment in solar energy production and supply chain capacity is attracted to Arizona as a result of tighter linkages within the cluster. These linkages extend among the value chains, the talent development systems, the research base, investors, and public policies.
Our approach Identify the characteristics of a successful industrial cluster Identify factors inherent in robust supply chain development Identify core clusters and their supply chains Identify critical gaps Recommend steps to close gaps and key players to engage Identify new directions to further build cluster capability Set milestones and fill gaps in collaboration
Membership Bud Annan, Arizona State University Fred Buss, Town of Gila Bend Bennett Curry, Arizona Commerce Authority Anthony Evans, Arizona State University Glenn Hoetker, Arizona State University Michael Neary, AriSEIA Ron Vokoun, Mortenson Construction
Utility scale Paloma plant (First Solar, 17 MW PV) Cotton Center (Solon, 17 MW PV) Solana (Abengoa, 280 MW Concentrating solar)
Distributed generation ASU Solar Parasol (Strategic Solar Energy/NRG Solar, 2.5 MW PV)
Partners and stakeholders
AZ solar industry - snapshot 300-400 AZ firms easily meet current in-state demand Range of solar technologies Photovoltaic (PV) Concentrated Solar Power (CSP) Solar Heating & Cooling (SHC) Technology-specific supply chains
Photovoltaic supply chain (pre-construction/installation) RAW WAFER SOLAR SOLAR SOLAR INGOT MATERIAL MFG CELLS MODULE PANEL U.S. largest polysilicon producer in 2008 (43%) but China, Taiwan and South Korea are now the key players Limited U.S. wafer manufacturing facilities Hemlock and MEMC North America = 7.4% of global cell production capacity (2010) North America = 8.7% of global module production (2009)
CSP supply chain (pre-construction/installation) Greater opportunities for localized manufacturing Components cut across technologies Mirrors, reflectors, collector structures, heat transfer fluids, salts, turbines, steel etc. 18 CSP U.S. mfg facilities in 2009 Solanas U.S. supply chain = 29 companies in 22 states ($730 million) 23% invested in AZ
AZ solar-related employment Solar Foundation (2011) 4,786 solar jobs at 900 AZ establishments 3rd largest state for solar jobs BLS suggest 49,717 jobs across all green goods and services (GGS) 23rd largest state for GGS jobs SEIA survey still in progress Seidman survey: 5,500-7,400 solar jobs 0.2-0.3% of AZs non-seasonally adjusted non-farm employment
AZ solar-related employment Employment Opportunities by Sector 383 814 8% 17% Manufacturing 1292 Installation 27% R&D Sales 1723 Other 574 36% 12% Source: Solar Foundation (2011)
AZ competitive advantages Solar insolation Proximity to California Land/resource availability Streamlined zoning and permitting Solar construction know-how On the job learning and innovation University research community Workforce supply
Cluster potential Viable solar cluster drives economic growth: Project employment and input impacts Attracts new downstream local suppliers Encourages certification Firms can export know-how out-of-state Limited potential for solar PV manufacturing Greater supply chain opportunities for other solar technologies Construction sector could be a real winner
Supply chain cluster example Construction = biggest benefactor Supply of steel, concrete, mirrors, nuts, bolts and electrical supplies Short-term employment impacts: Utility-scale plants = 1000+ jobs Commercial DG = 50-100 jobs Residential DG = 1-2 jobs Key: convert the jobs into job years
Challenges and barriers Utilities have almost met RPS targets Energy demand increases >1% each year Positive construction impacts will dry up Residential taxes and incentives are on a per household basis, not per system installed New AZ homes still built without solar ready ordinances Availability of capital investment Lack of optimism within the local industry Potential migration to states with opportunities
Cluster solution 1: Export Strategy Effective export strategy essential Principal target: California Significant job creation opportunities Galvanize inter-state dialogue to resolve transmission barriers
Cluster solution 2: R&D AZ solar R&D center Close co-operation between education, utilities, public and private sector CA ahead for solar training and courses But AZ is starting to catch up: First Solar/City of Phx/ASUs new solar engineering & commercialization certification ASUs new PSM (first in U.S.)

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Building an AZ solar supply chain and industrial cluster

  • 1. Building an AZ solar supply chain and industrial cluster Glenn Hoetker Anthony Evans
  • 2. Our mission More investment in solar energy production and supply chain capacity is attracted to Arizona as a result of tighter linkages within the cluster. These linkages extend among the value chains, the talent development systems, the research base, investors, and public policies.
  • 3. Our approach Identify the characteristics of a successful industrial cluster Identify factors inherent in robust supply chain development Identify core clusters and their supply chains Identify critical gaps Recommend steps to close gaps and key players to engage Identify new directions to further build cluster capability Set milestones and fill gaps in collaboration
  • 4. Membership Bud Annan, Arizona State University Fred Buss, Town of Gila Bend Bennett Curry, Arizona Commerce Authority Anthony Evans, Arizona State University Glenn Hoetker, Arizona State University Michael Neary, AriSEIA Ron Vokoun, Mortenson Construction
  • 5. Utility scale Paloma plant (First Solar, 17 MW PV) Cotton Center (Solon, 17 MW PV) Solana (Abengoa, 280 MW Concentrating solar)
  • 6. Distributed generation ASU Solar Parasol (Strategic Solar Energy/NRG Solar, 2.5 MW PV)
  • 8. AZ solar industry - snapshot 300-400 AZ firms easily meet current in-state demand Range of solar technologies Photovoltaic (PV) Concentrated Solar Power (CSP) Solar Heating & Cooling (SHC) Technology-specific supply chains
  • 9. Photovoltaic supply chain (pre-construction/installation) RAW WAFER SOLAR SOLAR SOLAR INGOT MATERIAL MFG CELLS MODULE PANEL U.S. largest polysilicon producer in 2008 (43%) but China, Taiwan and South Korea are now the key players Limited U.S. wafer manufacturing facilities Hemlock and MEMC North America = 7.4% of global cell production capacity (2010) North America = 8.7% of global module production (2009)
  • 10. CSP supply chain (pre-construction/installation) Greater opportunities for localized manufacturing Components cut across technologies Mirrors, reflectors, collector structures, heat transfer fluids, salts, turbines, steel etc. 18 CSP U.S. mfg facilities in 2009 Solanas U.S. supply chain = 29 companies in 22 states ($730 million) 23% invested in AZ
  • 11. AZ solar-related employment Solar Foundation (2011) 4,786 solar jobs at 900 AZ establishments 3rd largest state for solar jobs BLS suggest 49,717 jobs across all green goods and services (GGS) 23rd largest state for GGS jobs SEIA survey still in progress Seidman survey: 5,500-7,400 solar jobs 0.2-0.3% of AZs non-seasonally adjusted non-farm employment
  • 12. AZ solar-related employment Employment Opportunities by Sector 383 814 8% 17% Manufacturing 1292 Installation 27% R&D Sales 1723 Other 574 36% 12% Source: Solar Foundation (2011)
  • 13. AZ competitive advantages Solar insolation Proximity to California Land/resource availability Streamlined zoning and permitting Solar construction know-how On the job learning and innovation University research community Workforce supply
  • 14. Cluster potential Viable solar cluster drives economic growth: Project employment and input impacts Attracts new downstream local suppliers Encourages certification Firms can export know-how out-of-state Limited potential for solar PV manufacturing Greater supply chain opportunities for other solar technologies Construction sector could be a real winner
  • 15. Supply chain cluster example Construction = biggest benefactor Supply of steel, concrete, mirrors, nuts, bolts and electrical supplies Short-term employment impacts: Utility-scale plants = 1000+ jobs Commercial DG = 50-100 jobs Residential DG = 1-2 jobs Key: convert the jobs into job years
  • 16. Challenges and barriers Utilities have almost met RPS targets Energy demand increases >1% each year Positive construction impacts will dry up Residential taxes and incentives are on a per household basis, not per system installed New AZ homes still built without solar ready ordinances Availability of capital investment Lack of optimism within the local industry Potential migration to states with opportunities
  • 17. Cluster solution 1: Export Strategy Effective export strategy essential Principal target: California Significant job creation opportunities Galvanize inter-state dialogue to resolve transmission barriers
  • 18. Cluster solution 2: R&D AZ solar R&D center Close co-operation between education, utilities, public and private sector CA ahead for solar training and courses But AZ is starting to catch up: First Solar/City of Phx/ASUs new solar engineering & commercialization certification ASUs new PSM (first in U.S.)